Originally from Dispute Resolution Journal

Does the arbitral tribunal have a duty to investigate and rule on allegations of bribery, money laundering or fraud when these activities might taint a contract before them? Or should the tribunal leave allegations of corrupt activities to domestic courts at the enforcement stage? These are some of the questions addressed in this article. The authors presented a lengthy paper on this topic at the 22nd Annual Meeting of the ICC Institute of World Business Law in Paris on November 25, 2002.

An arbitral tribunal is appointed to resolve a dispute between private parties. This task is complicated where there are indications that the business dealings between the parties might be tainted by bribery, money laundering or fraud. The task is not made any easier by the possibility that one party might allege such corrupt activities for tactical reasons. It is even harder when the tribunal suspects that corruption has occurred but the parties do not wish the tribunal to address it.

In recent years, combating bribery of public officials and money laundering has become an international priority giving rise, as we show, to a broad range of legal international instruments and initiatives. This question then arises: How much have these developments affected the international public policy framework of modern commercial arbitration? The answer is a great deal.

This paper examines the public policy significance of bribery, money laundering and related fraud and the possible duties of the arbitral tribunal. Does the tribunal have a duty to investigate and rule on possible bribery, money laundering or fraud when these activities might taint a contract before them? Or should it leave allegations of corrupt activities to domestic courts at the enforcement stage? Finally, if arbitral tribunals have a duty to investigate and decide issues relating to these forms of corruption, as we believe they do, what then are the limits of that duty?